Value Chain Analysis Of Toyota Co.

TOYOTA Indus motor co. -: INTRODUCTION :VISION AND MISSION: "IMC’s Vision is to be the most respected and successful enterprise, delighting customers with a wide range of products and solutions in the automobile industry with the best people and the best technology". • • • • • •

The most respected. The most successful. Delighting customers. Wide range of products. The best people. The best technology.

Mission of Toyota is to provide safe & sound journey. Toyota is developing various new technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world. HISTORY: Indus Motor Company (IMC) is a joint venture between the House of Habib , Toyota Motor Corporation Japan (TMC) , and Toyota Tsusho Corporation Japan (TTC) for assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. vehicles in Pakistan through its dealership network. The company was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. The shares of company are quoted on the stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have 25 % stake in the company equity. The majority shareholder is the House of Habib. IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area measuring over 105 acres.Indus Motor company's plant is the only manufacturing site in the world where both Toyota and Daihatsu brands are being manufactured.

Heavy investment was made to build its production facilities based on state of art technologies. To ensure highest level of productivity world-renowned Toyota Production Systems are implemented. IMC's Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota Hilux Single Cabin 4x2 and 4 versions of Daihatsu Cuore. We also have a wide range of imported vehicles. MANAGEMENT TEAM: Ali S. Habib Chairman K Hyodo Vice Chairman Parvez Ghias Chief Executive Officer INFORMATION TECHNOLOGY Mr. Adnan Qazi Chief Information Officer FINANCE Muhammad Faisal Chief Financial Officer Mustafa Hasan Lakhani Company Secretary HUMAN RESOURCE Mr. Salim Azhar Director LOGISTICS, ADMINISTRATION & COMMERCIAL Mr. Salim Azhar Director MANUFACTURING Mr. Y. Tsubaki Director SALES & MARKETING Mr. Raza Ansari Director INTERNAL AUDIT Mr. Ahson Tariq Chief of Internal Audit

VALUE CHAIN ANALYSIS OF TOYOTA Indus Motors Co.

The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain consists of a series of activities that create and build value. They culminate in the total value delivered by an organization. The 'margin' depicted in the diagram is the same as added value. The organization is split into 'primary activities' and 'support activities.'

Primary Activities Inbound Logistics: Here goods are received from a company's suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organization. Toyota motors purchase their raw material from all around the world. In order to maximize their availability of raw material Toyota motors maintain good relationship with their suppliers. Toyota use JIT (Just In Time) approach for handling of raw material.

Operations: This is where goods are manufactured or assembled. Individual operations could include organizing the parts to make new cars & the final tune for a new car's engine. Toyota motors are known for their reliability which comes from efficient operations. Outbound Logistics: The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer. Toyota motors manage their own Show rooms in different countries. Toyota motors make their product easily assessable. Marketing and Sales: In true customer orientated fashion, at this stage the Toyota motors prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix. Service: This includes all areas of service such as final checking, after-sales service, complaints handling, training and so on. Toyota value their customers. Support Activities Procurement: This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. Toyota motors will be responsible for outsourcing (components or operations that would normally be done in-house are done by other organizations), and e-Purchasing (using IT and web-based technologies to achieve procurement aims). Technology Development: Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. Toyota motors implemented production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments.

Human Resource Management (HRM): Employees are an expensive and vital resource. Toyota motors manage recruitment and s election, training and development, and rewards and remuneration. Toyota motors consider their employees as HUMAN CAPITAL. The mission and objectives of the Toyota motor is the driving force behind the HRM strategy. Toyota motors uses following techniques to retain their employes: • Recruitment • Selection • Training and development • Compensation • Maintenance Firm Infrastructure: This activity includes and is driven by corporate or strategic planning. Toyota motors implemented Management Information System (MIS), and other mechanisms for planning and control in different departments. SUGESSIONS & RECMENDATIONS 1. Toyota motors should use Value Coalitions for better use of their under utilized recourses. Toyota develops synergies among their recourses.

Marketing

R&D

Production

CUSTOMERS

2. Toyota should use design to maximize the performance of their operations. Using the value chain approach, processes that provide direct value to the customer are modeled first. Derivative processes that support the value chain processes are modeled to support the value chain.

TOYOTA Company Functional and Process Based Designs Functional Design

Process Design

Marketing

Design Car

Finance

Sales

Build Car

Engineering

Market Car

Manufacturing

Deliver Cars

Distribution